Federal Register / Vol. 72, No.
4 / Monday, January 8, 2007 / Notices
D. Accelerated Approval of the
Proposed Rule Change as Modified by
Amendments No. 3 and 4 Thereto
The Commission finds good cause to
approve the proposed rule change as
modified by Amendments No. 3 and 4
prior to the 30th day after the
amendment is published for comment
in the Federal Register. Amendments
No. 3 and 4 makes clarifying changes to
the description of the proposed rule
change. The Commission believes that,
as a whole, Amendments No. 3 and 4
strengthen the proposed rule change
and do not raise any new regulatory
issues. Therefore, the Commission finds
good cause, consistent with section
19(b)(2) of the Act,27 to approve the
proposal, as amended, on an accelerated
basis.
V. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,28 that the
proposed rule change (SR–Amex–2006–
76), as modified by Amendments No. 1,
2, 3, and 4 be, and it hereby is, approved
on an accelerated basis.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.29
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E7–16 Filed 1–5–07; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55015; File No. SR–BSE–
2006–55]
Self-Regulatory Organizations; Boston
Stock Exchange, Inc; Notice of Filing
of a Proposed Rule Change and
Amendment No. 1 Thereto Relating to
the Definition of Complex Trade as
Applied to Trades Through the
Intermarket Linkage
December 28, 2006.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on December
13, 2006, the Boston Stock Exchange,
Inc (‘‘BSE’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change, as described in
Items I, II, and III below, which Items
have been substantially prepared by the
Exchange. The BSE filed Amendment
jlentini on PROD1PC65 with NOTICES
27 15 U.S.C. 78s(b)(2).
28 15 U.S.C. 78s(b)(2).
29 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
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811
No. 1 to the proposal on December 27,
2006. The Commission is publishing
this notice to solicit comments on the
proposed rule change, as amended, from
interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The BSE proposes to amend Chapter
XII, Section 1(c) of the rules of the
Boston Options Exchange (‘‘BOX’’) to
revise the definition of ‘‘Complex
Trade’’ as such definition applies to
trades through the Intermarket Linkage
(‘‘Linkage’’). The text of the proposed
rule change appears below, with
additions italicized and deletions in
[brackets]:
Chapter XII. Intermarket Linkage Rules
Sec. 1 Definitions
The following terms shall have the
meaning specified in this Section 1
solely for the purpose of this Chapter
XII:
(a)–(b) No Change.
(c) ‘‘Complex Trade’’ means the
execution of an order in an options
series in conjunction with the execution
of one or more related orders in
different options series in the same
underlying security occurring at or near
the same time for the purpose of
executing a particular investment
strategy and for an equivalent number
of contracts, provided that the number
of contracts of the legs of a spread,
straddle, or combination order may
differ by a permissible ratio [for the
equivalent number of contracts and for
the purpose of executing a particular
investment strategy]. The permissible
ratio for this purpose is any ratio that
is equal to or greater than one-to-three
(.333) and less than or equal to three-
to-one (3.00).
(d)–(s) No Change.
* * * * * the rules of a national securities
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of, and basis for,
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has substantially prepared
summaries, set forth in Sections A, B,
and C below, of the most significant
aspects of such statements.
PO 00000 Frm 00084 Fmt 4703 Sfmt 4703
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
This proposed rule change will
amend the definition of ‘‘Complex
Trade’’ in Chapter XII, Section 1(c) of
the BOX Rules. For Linkage purposes,
the BOX Rules define a ‘‘Complex
Trade’’ as a trade reflecting the
execution of an order in an options
series in conjunction with one or more
other orders in different series in the
same underlying security ‘‘for the
equivalent number of contracts.’’ A
Complex Trade is exempt from the
trade-through rule.3
In contrast to the Linkage definition of
‘‘Complex Trade,’’ Chapter V, Section
27(a) of the BOX Rules defines
‘‘complex orders’’ for other purposes on
the Exchange. This definition includes
‘‘Ratio Orders,’’ which do not require
that there be an equivalent number of
contracts in the orders.4 Specifically,
the rule permits ratios that are equal to
or greater than one-to-two. The
Exchange applies modified priority
rules to complex orders.
According to the BSE, the proposed
rule change will conform the Linkage
definition of Complex Trade to BOX’s
general definition of the concept. The
BSE represents that the other five
options exchanges are adopting a
similar definition, which will result in
uniform application of the term across
all options exchanges. The BSE believes
that such uniformity will facilitate the
speedy execution of complex trades on
all markets.
2. Statutory Basis
The basis under the Act for the
proposed rule change is the requirement
under Section 6(b)(5) of the Act 5 that
exchange be designed to promote just
and equitable principles of trade, to
remove impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, to protect investors and the
public interest. In particular, the BSE
believes that the proposed rule change
will make BOX’s Linkage Rules
consistent with BOX’s internal market
rules and will facilitate the trading of
complex orders.6
3 See Box Rules, Chapter XII, Section 3(b)(vii).
4 See Box Rules, Chapter V, Section 27(a)(vi).
5 15 U.S.C. 78f(b)(5).
6 See Amendment No. 1.
E:\FR\FM\08JAN1.SGM 08JAN1
 812 Federal Register / Vol. 72, No. 4 / Monday, January 8, 2007 / Notices
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The BSE does not believe that the
proposed rule change will impose any
burden on competition not necessary or
appropriate in furtherance of the
purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
The BSE has neither solicited nor
received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 35 days of the date of
publication of this notice in the Federal
Register or within such longer period (i)
as the Commission may designate up to
90 days of such date if it finds such
longer period to be appropriate and
publishes its reasons for so finding or
(ii) as to which the self-regulatory
organization consents, the Commission
will:
A. By order approve such proposed
rule change; or
B. institute proceedings to determine
whether the proposed rule change
should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change, as amended, is consistent with
the Act. Comments may be submitted by
any of the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form http://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rule-
comments@sec.gov. Please include File
No. SR–BSE–2006–55 on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–BSE–2006–55. This file
number should be included on the
subject line if e-mail is used. To help the November 27, 2006. The Commission
Commission process and review your
jlentini on PROD1PC65 with NOTICES
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (http://www.sec.gov/
rules/sro.shtml). Copies of the
VerDate Aug<31>2005 17:57 Jan 05, 2007 Jkt 211001
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
Room. Copies of such filing also will be
available for inspection and copying at
the principal office of the Exchange. All
comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to File
Number SR–BSE–2006–55 and should
be submitted on or before January 29,
2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.7
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E6–22661 Filed 1–5–07; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55025; File No. SR–CBOE–
2006–96]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Order Approving a
Proposed Rule Change Regarding
Allocation of Stocks to CBSX DPMs
December 29, 2006.
I. Introduction
On November 20, 2006, the Chicago
Board Options Exchange, Incorporated
(‘‘CBOE’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and
Rule 19b–4 thereunder,2 a proposal
relating to the allocation of stocks for
the CBOE Stock Exchange (‘‘CBSX’’).
The proposal was published for
comment in the Federal Register on
3 6 See Securities Exchange Act Release No. 54831
received no comments on the proposal.
7 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 54792
(November 20, 2006), 71 FR 68659.
PO 00000 Frm 00085 Fmt 4703 Sfmt 4703 E:\FR\FM\08JAN1.SGM
This order approves the proposed rule
change.
II. Description of the Proposal
The purpose of this filing is to adopt
rules that would allow for the allocation
of stocks to CBSX DPMs.
The Exchange has represented that it
intends to submit a proposal to modify
Chapters 50–55 of its rules, which
govern the trading of non-option
securities on the Exchange,4 in
connection with the establishment of
CBSX (the ‘‘CBSX Trading Rules
Proposal’’). In addition, the Exchange
has proposed rules to establish CBSX as
a facility of the Exchange (the ‘‘CBSX
Facility Proposal’’).5 If the Commission
approves these proposals, CBSX would
be a facility of the Exchange and would
serve as the Exchange’s vehicle for
trading non-option securities. In
addition, the Exchange has filed for
immediate effectiveness a proposal to
appoint CBSX DPMs (the ‘‘CBSX DPM
Appointment Proposal’’).6 Any
appointments under the CBSX DPM
Appointment Proposal and any
allocations made to such DPMs under
this proposal would be contingent on
Commission approval of the CBSX
Trading Rules Proposal—in particular,
those rules governing DPM trading
procedures and obligations on CBSX—
and the CBSX Facility Proposal.
Initial CBSX DPM stock allocations
would be handled pursuant to proposed
CBOE Rule 53.54. For the initial launch,
and potentially in instances where
CBSX seeks to commence trading a
number of new securities at one time,
CBSX would conduct a ‘‘draft’’ for
eligible CBSX DPMs to select available
stocks. The draft order would be
determined randomly. In connection
with the initial launch, the draft would
apply to the first 500 securities
selected.7 The remaining securities
slated for trading on CBSX would be
allocated randomly by CBSX to the
CBSX DPMs equally.
CBSX would utilize proposed CBOE
Rule 53.54 for future stock allocations as
well. In those cases, a draft could be
4 See Securities Exchange Act Release No. 54422
(September 11, 2006), 71 FR 54537 (September 15,
2006) (approving SR–CBOE–2004–21). See also
Securities Exchange Act Release No. 54526
(September 27, 2006), 71 FR 58646 (October 4,
2006) (approving SR–CBOE–2006–70).
5 See SR–CBOE–2006–110 (filed December 26,
2006).
(November 29, 2006), 71 FR 70814 (December 6,
2006) (notice of filing and immediate effectiveness
of SR–CBOE–2006–100).
7 Telephone conversation between Angelo
Evangelou, Assistant General Counsel, CBOE, and
Nathan Saunders, Special Counsel, Division of
Market Regulation, Commission, November 20,
2006.
08JAN1